Summary: US quit rate rises in June JOLTS report; skills, pandemic dislocations remain; job openings, separations up; businesses “caught on back foot”, US labour market rebound “in full swing”; “good reason” to expect further payroll gains ahead, should “further justify tapering”.
The number of US employees who quit their jobs as a percentage of total employment increased slowly but steadily after the GFC. It peaked in March 2019 and then tracked sideways until virus containment measures were introduced in March 2020. The quit rate then plummeted as alternative employment opportunities rapidly dried up but proceeded to recover back to its pre-pandemic rate in the third quarter of 2020.
Figures released as part of the most recent JOLTS report show the quit rate rose in June. 2.7% of the non-farm workforce left their jobs voluntarily, up from May’s 2.5%. There were 239,000 more quits during the month, outpacing the additional 938,000 people employed in the non-farm sector in percentage terms.
“Skills mismatches amid pandemic dislocations remain a strong theme in labour data,” said Westpac economist Lochlan Halloway.
US Treasury bond yields crept a little higher on the day. By the close of business, 2-year, 10-year and 30-year Treasury yields had each inched up 1bp to 0.22, 1.31% and 1.96% respectively.
The rise was led by 72,000 more quits in the “Professional and business services” sector while sectors which experienced declines did so only in modest amounts. Overall, the total number of quits for the month rose from May’s revised figure of 3.630 million to 3.869 million.
Total vacancies at the end of June increased by 590,000, or 0.6%, from May’s revised figure of 9.483 million to 10.073 million, driven by a 227,000 rise in the “Professional and business services” sector, an 133,000 increase in the “Retail trade” sector and 121,000 more openings in the “Accommodation and food services” sector. Overall, 12 out of 18 sectors experienced more job openings than in the previous month.
Total separations increased by 254,000, or 4.8%, from May’s revised figure of 5.330 million to 5.584 million. As with total vacancies, the rise was led by the “Professional and business services” sector, where there were 124,000 more separations than in May. Separations increased in 12 out of 18 sectors.